Financial Services, Savings and Borrowing Among Low- and Moderate-Income Households: Evidence from the Detroit Area Household Financial Services Survey

50 Pages Posted: 16 Apr 2008

See all articles by Michael S. Barr

Michael S. Barr

University of Michigan Law School; University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; University of Michigan, Center on Finance, Law, and Policy

Date Written: March 30, 2008

Abstract

This paper presents new empirical evidence documenting the financial services behavior of low- and moderate-income (LMI) households based on a household survey designed by the author and implemented with the Survey Research Center at the University of Michigan. The Detroit Area Household Financial Services (DAHFS) survey uses a random, stratified sample to explore the full range of financial services used by LMI households, together with systematic measures of household preference parameters, demographic characteristics, and households' balance sheets. Results from over 1,000 interviews in the DAHFS study suggest that the structure of the financial services, credit and payments systems in the formal and informal sectors imposes significant costs on LMI households, including high transaction costs, lessened opportunities to save, higher costs of borrowing, and other difficulties. The paper discusses strategies to help transform the financial services market for LMI households.

Suggested Citation

Barr, Michael S., Financial Services, Savings and Borrowing Among Low- and Moderate-Income Households: Evidence from the Detroit Area Household Financial Services Survey (March 30, 2008). 3rd Annual Conference on Empirical Legal Studies Papers. Available at SSRN: https://ssrn.com/abstract=1121195 or http://dx.doi.org/10.2139/ssrn.1121195

Michael S. Barr (Contact Author)

University of Michigan Law School ( email )

625 South State Street
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University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy ( email )

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Ann Arbor, MI 48109
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University of Michigan, Center on Finance, Law, and Policy ( email )

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Ann Arbor, MI 48103
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